Medicare Now Covers Eli Lilly’s Zepbound for Sleep Apnea, Expanding Access to Obesity Drug
In a significant development, Medicare plans can now cover Eli Lilly And Co‘s (NYSE:LLY) popular obesity drug, Zepbound (tirzepatide), if prescribed for moderate to severe obstructive sleep apnea (OSA), which affects breathing during sleep. This change could broaden access to Zepbound, as it’s not yet widely covered by Medicare or other insurance plans for weight loss.
Last December, the FDA approved Zepbound as the first and only prescription drug for adults with moderate to severe OSA and obesity. The drug should be used alongside a low-calorie diet and increased physical activity. In phase 3 SURMOUNT-OSA studies, tirzepatide met all key primary and secondary endpoints, demonstrating a median reduction of up to 62.8% in the apnea-hypopnea index (AHI), or about 30 fewer events per hour of sleep, compared to placebo.
A spokesperson for the Centers for Medicare & Medicaid Services (CMS) told CNBC that Medicare Part D can cover obesity drugs only if they’re FDA-approved for another accepted clinical use. The spokesperson also noted that prior authorization might be required to ensure the drug is prescribed for the approved condition.
Zepbound’s Medicaid coverage varies by state, depending on its prescribed use and whether the manufacturer has agreed to a Medicaid drug rebate contract. If such a contract exists, manufacturers provide discounts to states in exchange for Medicaid coverage, and states share these discounts with the federal government.
Last November, the Biden-Harris administration proposed expanding Medicare and Medicaid coverage for obesity drugs to address high costs that have drawn criticism. The proposed legislation aims to make these treatments more accessible, potentially benefiting around 3.4 million Medicare beneficiaries and 4 million Medicaid enrollees, and reducing out-of-pocket costs by up to 95% for some.
President Joe Biden and Sen. Bernie Sanders, Chair of the Senate Health, Education, Labor, and Pensions Committee, have long railed against the exorbitant prices U.S. pharmaceutical companies charge for prescription drugs. Americans pay the world’s highest prices for essential medicines, and one in four cannot afford their prescriptions. Biden has argued that the claim that high U.S. prices fund lower, equitable prices abroad is unacceptable.
Shares of LLY closed at $773.29 on Wednesday.
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